Merchant Adoption of Bitcoin (BTC) Nearly Triples in 2023

2023 was a landmark year in terms of BTC adoption, but the SEC is waving the cautionary flag for people and institutions to steer clear of FOMO-motivated investing.

The number of global merchants accepting Bitcoin payments nearly tripled in 2023, with notable growth in Central and South America and the Philippines. Meanwhile, Próspera, a special economic zone in Honduras, advanced its crypto integration by recognizing Bitcoin (BTC) as a unit of account, encouraging even more financial freedom in the region.

However, amidst this positive trend, the U.S. Securities and Exchange Commission (SEC) issued a very stern warning about the risks of FOMO-driven crypto investing, particularly in light of the pending decision on Bitcoin ETFs. This warning, coming just days before the ETF decision deadline, has spurred a lot of speculations about whether it could be a sign that Bitcoin ETFs will be approved, or whether this is a warning to not get too excited just yet.

BTC Merchant Adoption Surged in 2023

Could the U.S Securities and Exchange Commission’s (SEC) decision about Bitcoin ETFs be one of the biggest breakthroughs in recent years on the path to institutional acceptance of crypto? This might just be the case.

The number of merchants globally accepting Bitcoin (BTC) payments almost tripled in 2023. Data from Bitcoin merchant mapping provider BTC Map reveals an impressive increase from 2,207 merchants at the beginning of the year to 6,126 by the end of 2023. Despite a slight dip from the late September peak of 6,590 merchants, the overall growth trajectory certainly points to a growing trend of businesses integrating cryptocurrency into their daily operations.

BTC Map's data revealed interesting geographical patterns, with Central and South America showing larger concentrations of BTC-accepting merchants, while Africa and Asia lag behind. The United States and Europe, on the other hand, demonstrate a robust presence of merchants open to crypto transactions.

In Southeast Asia, the Philippines leads with the highest number of merchants accepting Bitcoin, presenting a stark contrast to regions like China, India, and Russia, where BTC merchants are almost non-existent.

Bitcoin’s Milestone in Honduras

It is not just businesses that are starting to see the potential of BTC, but countries as well. Próspera, a special economic zone on Roatan Island in Honduras, recently took a bold step in embracing Bitcoin. Less than two years after adopting BTC as legal tender, Próspera has now officially recognized Bitcoin as a unit of account. This decision now allows BTC to be used for measuring the market value of goods and services.

The initiative was led by Jorge Colindres, the acting manager and tax commissioner of Próspera ZEDE (Zone for Employment and Economic Development), who announced the development on Jan. 5. In a statement posted on X on Jan. 7, Colindres explained that the main reason behind this move was to offer more financial freedom to people and businesses operating in the area. He emphasized Próspera ZEDE's commitment to the principles of financial and monetary freedom, advocating for the right of people to conduct transactions, manage their accounting, and report taxes in their currency of choice.

However, Colindres also pointed out some limitations, particularly regarding the implementation of the "Final BTC Tax Payment Procedure." He pointed towards technological challenges with the eGovernance system and external regulatory issues as obstacles that are yet to be overcome.

For the time being, entities choosing to adopt BTC will determine their tax liabilities in reference to BTC for internal accounting purposes. However, it is important to note that these liabilities have to be reported to Próspera ZEDE in either United States dollars or the Honduras lempira. Meanwhile, Colindres stated that once the existing issues are resolved, entities will be able to report and pay their tax liabilities in BTC directly to Próspera ZEDE. Entities interested in adopting BTC as their unit of account are required to file a notice with Próspera’s tax commission within 30 days of the relevant tax period.

Próspera ZEDE was initially launched in May of 2020 on the northern island of Roatan. The region decided to make BTC legal tender in April 2022, just about seven months after Honduras’ neighbor, El Salvador, made the crypto legal tender across the whole country.

SEC Issues Fresh Warning on Crypto FOMO

With the Bitcoin ETF announcement deadline just around the corner, it is no wonder that people are getting excited about BTC and its potential. However, it might be a good idea for the crypto community to not get too excited just yet.

The SEC has reissued a stark warning about the risks of FOMO (Fear of Missing Out) investing in cryptocurrencies. This warning came mere days before the anticipated decision on the approval of spot Bitcoin ETFs, a topic that has been the center of discussions on social media platforms over the past few weeks.

On Jan. 6, the SEC's Office of Investor Education took to X to warn retail investors about the potential pitfalls when it comes to trading digital assets. This includes a range of investments from meme coins and cryptocurrencies to non fungible tokens (NFTs). The timing of this warning is particularly interesting, considering the fact that the SEC is expected to make a decision on one or more spot Bitcoin ETFs by a Jan. 10 deadline.

Social media has been abuzz with speculation that this warning could suggest that the SEC will approve Bitcoin ETFs. On the other hand, some people believe this is the SEC’s attempt to protect investors because they might not be approving the ETFs. However, the SEC's message was still very clear: investors should steer clear of making decisions based on FOMO and celebrity endorsements.

The SEC's stance about this problem does not come without its reasons. Over the years, the regulator has taken action against many celebrities for their role in promoting certain cryptocurrencies. A very popular example is the case of Kim Kardashian, who agreed to pay a $1.26 million settlement to the SEC. She was charged with failing to disclose a payment of $250,000 for promoting a sham token called Ethereum Max (EMAX) to her 360 million Instagram followers.

The SEC's warning also touched on the volatility of digital assets, which can be heavily influenced by trends and influencers on social media. The report pointed out the high-risk nature of these investments, where big losses can occur in the blink of an eye as market dynamics shift.